One of the recently award-winning CEDICE campaign advertisements on behalf of private property rights in Venezuela. (Translation: “The law of social property will take away what is yours. No to the Cuban law.” Image: CEDICE)
Living in the U.S., it is hard to grasp how important private property rights are. Whenever we buy, sell, or produce something we automatically assume that we own it. We don’t think about it because we live in a country where the government guarantees the right to private property. This is not, however,the case in other parts of the world. In Venezuela, President Hugo Chavez has launched a mission to restrict and expropriate private property. Every day the headlines in the local newspapers in Venezuela talk about how government has “nationalized” a bank, a supermarket or a factory. One brave organization has gained international recognition for defending property rights in Venezuela as a basic human right.
Last Sunday, Venezuelans went to the polls to elect a new congress. Depending on whom you ask in Venezuela this election marks either a triumph for the opposition or a vote of confidence for Hugo Chavez’s Bolivarian revolution. One important result of the elections is that Chavez’s party (PSUV) no longer holds a super majority in the legislature. The opposition now has control over 1/3 of the assembly which means that Chavez will no longer be able to use the legislature as a simple rubber-stamp.
Presidential and vice-presidential candidates in Colombia during presidential debate in Barranquilla organized by Fedesarrollo. (Photo Credit: El Heraldo)
Being in the US it is sometimes hard to understand the dynamics of elections abroad. For example, it would be obvious to expect that given the impact of the global financial crisis worldwide, economic issues would be at the forefront of any presidential election this year.
In Colombia, however, economic issues are yet to be debated in depth by presidential candidates ahead of the election on May 30. CIPE ‘s long standing partner, the Foundation for Higher Education and Development (Fedesarrollo) is pushing hard to have a serious discussion on much needed economic reforms among presidential candidates. This is not an easy task in a region where charisma and ideology have often been the main guiding principles for electing public officials.
Peru’s economy has been steadily growing over the last 5 years and things are getting better for more and more people. This is good news in particular for a country that had to overcome terrorism and severe economic hardship. However, while things are getting better, recent surveys show that young people, in particular in rural Peru, are not satisfied with democracy and the market economy. In response to this the Peruvian think tank Instituto Invertir launched LíderAcción, a leadership and entrepreneurship program for university students from rural Peru.
In the article “Don’t Turn Your Back on Reforms: Can Democratic Market Economies
Take Root in Latin America?” that was published by CIPE, I mentioned that one of the biggest challenges for Latin America is to make people feel that they are part of the system. This is the case in Peru where according to recent opinion polls, 86 percent of Peruvians between 18 and 27 are either unhappy or extremely unhappy with democracy, and 80 percent are not interested in issues related to democracy.
Since about 30 percent of the Peruvian population is between the ages of 15 and 24 years old, this presents a significant challenge for the future of democratic institutions in the country. Peru is generally viewed as a successful economic model with some of the highest growth rates in the region in recent years, but the wealth and opportunity in Peru are centralized in Lima, and negative attitudes towards democracy are much more prevalent in rural areas outside Lima that have been left out of the economic success.
In response to this lack of confidence in democracy and the free market economy and a negative image of the private sector and entrepreneurship among the youth, especially from low-income families located in the countryside, the LíderAcción program was designed by the Peruvian NGO Instituto Invertir, the Peruvian University of Applied Sciences (UPC), and CIPE. This education program opens a window of opportunity to foster private enterprise, democracy, and leadership development in Peru.
The first LíderAcción education program awarded 200 scholarships to university students from rural areas in Peru to attend three separate three-day education sessions in Lima on leadership, entrepreneurship, communication, market economy, business plan development, and civic engagement.
On September 28, the Ecuadoran public voted overwhelmingly in favor of adopting a new constitution that had been swiftly drafted by the Constitutional Assembly and finalized by the government of President Rafael Correa. Little analysis has been applied to this 150-page document. What will this mean for the rule of law in Ecuador?
What is understood about the provisions of the new constitution is worrisome; the lack of understanding in Ecuador about how the constitution will be interpreted is of even greater concern. A number of the constitution’s provisions could present challenges to the rule of law and the future of private investment in Ecuador, including:
- Expanded executive control over the judicial and legislative branches of government, as well as the central bank.
- Respect for property rights is now based on ambiguous notions of social and environmental responsibility. The provisions leave huge discretionary decision-making to the government to define what this means.
- The government will be able to intervene in the pricing of market goods.
- International arbitrage is now prohibited in contracts for foreign investment.
While it is unclear how the government will implement the new constitution, the anti-business tenor of the document and its cloudy definition of property rights and contract law will likely inhibit future foreign investment in the country, and turn back progress made to date.
Dora de Ampuero of the Ecuadorian Institute of Political Economy (IEEP) explains that “the new constitution is structured in such a way that much of its content is confusing, which gives the executive the opportunity to interpret the new text however they best see fit.” She further explains that “It is still too early to know where the country is heading, but if the guiding principles of the constitution are followed, then Ecuador will become a closed economy that will be limited by government intervention.” IEEP has been engaged in an active campaign to promote better understanding of the market economy and the principles of democracy through a weekly radio and television program and public forums, with a particular focus on issues that are important to young leaders. This work is especially important now that the new constitution has been approved.
Reading the newspaper headlines this week it looks like Andres Oppenheimer’s and other author’s predictions of Fidel Castro’s demise have finally come true. (There are dozens of books with titles like “Castro’s Final Hour” or “After Fidel” that have been published over the last 50 years since Fidel came to power.) However, the million dollar question is: Will things actually change now that Fidel has retired as commander in chief?
The long illness that forced Fidel to temporarily transfer power to his brother was hardly the “transition” that most people would have hoped for. The Cuban government showed it could function even without Fidel the micromanager running things on a day to day basis. Now that Raul Castro will permanently assume the role of commander in chief it looks like the government’s structure will largely remain intact. Also, Fidel announced that he would write prolifically and continue to fight for the revolution. For now it looks like Fidel will exert much power from behind the curtains.
How much longer will the Cuban people have to wait to be able to hold free and fair elections and join all other countries in the region that have managed to transition to democracy?
The CIPE Development Blog provides coverage of the Center for International Private Enterprise and its partner network at work -- highlighting successes, drawing out lessons from failure, and exploring the broader issues of political and economic development. For more information visit CIPE.org.